India Raises Lending Rate to Banks

By

P.R. Venkat,

Vipin Nair and

Subhadip Sircar

Updated Feb. 1, 2007 12:01 a.m. ET

MUMBAI, India -- Looking to curb demand for bank loans in one of Asia's fastest-growing economies, the Reserve Bank of India raised the rate it charges on short-term loans to commercial banks. It left unchanged the rate it pays on money it borrows.

The central bank warned of concerns over rapid asset and credit growth, a move that economists said suggests further tightening is possible in the near term.